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Man Pleads Guilty To Mine Kickback Scheme

Thu, 08/07/2014 - 4:01pm
JONATHAN MATTISE, Associated Press

CHARLESTON, W.Va. (AP) — A Delbarton man pleaded guilty Thursday to spearheading a kickback scheme at an Arch Coal mine in southern West Virginia.

David E. Runyon's guilty plea came in U.S. District Court in Charleston. He faces up to 25 years in prison and $500,000 in fines for extortion and tax evasion.

Judge Thomas Johnston said Runyon's plea agreement includes $1 million in restitution to Arch and about $426,000 to the Internal Revenue Service.

Federal prosecutors say companies had to pay kickbacks to Arch employees for business at the Mountain Laurel mining complex in Logan County.

Prosecutors say kickbacks totaled nearly $2 million from 2007 to 2012. The St. Louis-based company is one of the biggest coal producers and marketers worldwide.

Runyon, 46, orchestrated the setup as Mountain Laurel's general manager, court documents state.

Companies knew Arch would sever their contracts if the side payments stopped. Likewise, Runyon knew losing the contracts would hurt the companies, according to court documents.

Runyon is among 10 men who have pleaded guilty to various charges related to the scheme. Four are former Arch employees. The rest were contractors and vendors.

"This kind of pay-to-play scheme hurts honest vendors in the coal industry_business people who refuse to pay bribes as a way to get customers," U.S. Attorney Booth Goodwin said via email Thursday.

The contracts that hinged on kickbacks ranged from mine machine repair to contracted labor. Alvis R. Porter, for instance, contracted to provide Mountain Laurel construction services such as heavy machinery rentals and operation. Over four years, the Holden resident paid more than $400,000 to maintain lucrative contracts with Arch, court documents state.

Porter, a former Logan County Circuit Court clerk, faces up to five years and $250,000 in fines in the scheme.

"Mr. Porter said 'Let's both get our barrels full' and offered to start paying kickbacks due to his fear that unless kickbacks were paid he would lose the business and suffer economic harm," according to a court stipulation of facts.

Arch said it had reached out to the U.S. attorney for help investigating the possible misconduct. Goodwin said an investigation is still ongoing.

Johnston said Runyon was released on a $10,000 bond. His sentencing will take place Nov. 19.

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